I've generally considered the market mix of carbon cap-and-trade with limits based on science a good mechanism, but subject to bad implementation. I don't see the Senate doing a good job implementing it as special interests have undermined it by giving away instead of marketing permits, etc.
While a carbon tax is simpler its price is generally set by Congress which has a bad track record in setting the prices right.
So this new proposal might be a way to move forward reasonably. (Actually similar to something Al Gore proposed years ago of having most of the fees rebated to taxpayers on a per-person basis.)New Deal for U.S. Climate Policy? « The Baseline Scenario
Last Friday, Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) unveiled the CLEAR (Carbon Limits and Energy for America’s Renewal) Act, which could break the impasse in the debate over U.S. policy on climate change (McClatchy coverage is here.)
CLEAR has won a favorable reception from a broad swath of the political spectrum, ranging from ExxonMobil to Friends of the Earth. The scroll of supportive statements on Cantwell’s website includes praise from the AARP, the American Enterprise Institute, former U.S. Labor Secretary Robert Reich, Alaska’s Republican Senator Lisa Murkowski, and MoveOn.org.
CLEAR is a “100-75-25-0” policy:
The Cantwell-Collins bill also strictly limits the buying and selling of permits to prevent carbon market speculation and profiteering.
100% of the permits to bring fossil carbon into the U.S. economy will be auctioned from day one – there are no permit giveaways.
75% of the auction revenue is returned directly to the public as equal per person dividends.
25% of the auction revenue is devoted to investments in energy efficiency, clean energy, adaptation to climate change, and assistance for sectors hurt by the transition from the fossil-fueled economy.
Zero offsets are allowed: polluters cannot avoid curbing use of fossil fuels by paying someone else to ostensibly clean up after them.